By George! Income Favorites

08/29/2002 12:00 am EST


Neil George

Editor-in-Chief, Income Publication and Products, Agora Financial

Few advisors are as worldly as Neil George, who has worked on six continents and covers the entire globe looking for investment opportunities. Indeed, he is as comfortable discussing the companies he recently visited in the Far East as he is picking favorites among domestic issues. Here are his latest favorites.

“For many investors who've been keeping tabs on my market ideas, most of the ones that have been working out best are on the income side of the market. With the US economy in a period of stability and modest growth at best, the bonds and stocks that pay you month-in and month-out are going to keep you afloat. My favorites include the Treasuries of Korea and Mexico. Both countries continue to improve their credit standings and ratings - quarter after quarter. And a discussion of higher-yielding bonds can't be held without my pitching those from Iceland. That market remains AAA-rated and is generating 8% and falling, which means that bond prices keep soaring.”  

"Among bond funds, I like Vanguard GNMA and two closed-end global funds - PIMCO Strategic Global (RCS NYSE), yielding 7.5%, and Strategic Global (SGL NYSE) from Brinson Advisors, yielding over 9%.”

“But even income investors can't live on bonds alone, so I also suggest several stocks that continue to generate high income and some price gains as well. At the top of the list are some of my favored mortgage company REITs, starting with Thornburg Mortgage (TMA NYSE) and Annaly Mortgage (NLY NYSE). For the more risk-tolerant investor, I also recommend FBR Asset Management (FB NYSE). These REITS currently provide double-digit yields.”

"And while the mortgage market remains solid for now, remember that some old tried-and-true owners of properties, ranging from doctors' offices to outpatient surgical centers, continue to provide attractive dividend yields and stable asset values. These include Healthcare Realty (HR NYSE) and Healthcare Properties (HCP NYSE), both yielding over 7%. In addition, I also like the pawnshop of the commercial real estate markets, WP Carey (WPC NYSE) and its near 8% yield.”

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